If you're new here, this blog will give you the tools to become financially independent in 5 years. The wiki page gives a good summary of the principles of the strategy. The key to success is to run your personal finances much like a business, thinking about assets and inventory and focusing on efficiency and value for money. Not just any business but a business that's flexible, agile, and adaptable. Conversely most consumers run their personal finances like an inflexible money-losing anti-business always in danger on losing their jobs to the next wave of downsizing.
Here's more than a hundred online journals from people, who are following the ERE strategy tailored to their particular situation (age, children, location, education, goals, ...). Increasing their savings from the usual 5-15% of their income to tens of thousands of dollars each year or typically 40-80% of their income, many accumulate six-figure net-worths within a few years.
Since everybody's situation is different (age, education, location, children, goals, ...) I suggest only spending a brief moment on this blog, which can be thought of as my personal journal, before delving into the forum journals and looking for the crowd's wisdom for your particular situation.

The biosphere is a complex coupled system and by coupled I mean that parts of it affects other parts which affect the first part back and so on. By complex I mean that the details are not or can not be known. Such system can be analyzed in their equilibrium configuration, basically one removes the time-dependent terms. That usually makes them simpler. For even more simplicity only dominant terms are considered. Also the equations can be linearized.

The interesting thing about dynamical systems is that they have various behaviors for various sets of parameters. Such systems may be remarkably robust over a large range of parameter space that is to say if we change the conditions, the system will not change much. If a critical point is reached, however, the system will change a lot.

Consider a piece of wood. It will be a piece of wood for many different temperatures, but at a certain point it will catch fire and be something totally different. The transition is usually fast (happens over a narrow temperature range).

The violent transition makes it difficult to estimate exactly when the transition will occur. This is because the transition as opposed to the linearized description is abrupt. Humans tend to have a very linearized view of things. If human vision/understanding/imagination was a Taylor expansion most people would be capable of 0th order perception and scientists would be capable first order perception using their mathematical/conceptual models. We do not really have good tools/brains to understand higher orders although they can be computationally simulated.

So suppose we have no concept of fire and we start heating the wood. One would think, well the piece is getting warmer, but it will remain a piece of wood, since that it has always been and if we keep heating it, we’ll merely get a hotter piece of wood. Why now the wood is smoking?! That’s probably some attribute of warm wood, nothing to worry about. If we keep heating all we’ll get is probably more smoke… and so on.

Similarly it is popular to note that humans are very smart, because humanity has solved all its problems in the past and thus it will be able to solve all its problems in the future — implicitly assuming that the humanity’s problems will never grow faster than human ingenuity. What if that is not the case?

Add to this the problem of unintended consequences. Suppose we have a field of corn with some undesired ‘elements’ like corn eating bugs. Now we eliminate the bugs using pesticide. However, some bugs grow resistant (unintended consequence) just like resistant bugs in your home become dominant as you remove their weaker competition with cleaning agents. In the field the sprayed bugs may be eaten by birds who die and thus stop eating bugs (another unintended consequence, this one is of second order). As a result, we now a system which is worse of than before but now depends on pesticide, since we changed it. The problem is the same with the human body, bacteria and antibiotics.

That is to say, if you take a self-adjusting system linearly away from its equilibrium, you usually have to keep adjusting, and your ‘adjustments’ will have to get bigger and bigger until you eventually fail.

The closer you are to the critical point the easier it is to fail. Once a variable approaches it’s critical point the reaction in some other part of the system will become violent. If the violent action can not be dampened, there is going to be trouble. Humans can try to dampen effects, but are they clever enough to dampen them forever?

If this is not convincing consider the economic system. This system was totally ‘written’ by humans and it is much simpler than nature, yet still, crashes (abrupt changes) occur and despite tons of regulations they can seemingly not be avoided. Another example of a human system is the Windows operation system. These are both cases, where humans have built something out of parts that are easy to understand in isolation, but where understanding of the emergent behavior of the complex system that obtains is apparently beyond us.

The worry here is that humans mayare building systems that have the potential to destroy us. The first such system was the mix of the nation-state and nuclear weaponry. The second such system is using fossil fuels both as a source of energy and as an indirect source of food.

8 users responded in " Complexity "

This also explains why it is so difficult for say something like a Windows OS environment how it can’t upgrade as fast and efficiently as possible since it is too complex built on previous systems. It’s not perfect but it works. It leaves holes that can potentially be exploited just like the economic system.

brauhster said,

A type 0 system controls position, type 1 controls speed, and type 2 controls acceleration. A type 2 feed back system is mostly attempted with digital feedback. Nature is analog at the macro level.

Very few understand how difficult a type 2 system is to control. Yet nature does it without thinking.

A great article Jacob.

Jacob said,

@brauhster – The main drive of my research was working on tightly coupled dynamic systems that switched between stable and unstable (oh say, like the explosion in a combustion engine). I had one independent variable (time) and 310 dependent ones that decoupled into 7+303 (the 303 where chemical). And yes, I think one needs several years of staring at such a thing to really understand how challenging it is. I was one of the few that attacked this problem dynamically and I would often get into discussions with the “linearizers” (type 1 thinkers) about cause and effect. It seems to me that there is no such type 2 thinking at all in a field like economics, where you’ll have one group arguing that A is the cause and another one saying it’s B, and me pulling my hair and going “why don’t you see it?!”.

And funny enough, I sometimes fantasized about building an analog computer to handle what I was doing since it only became comparable in speed to real time once I parallelized it and moved it onto a supercomputer.

If Mathematicians could solve the one problem that really matters in modern science, we would take an enormous step forward … that one problem?
“Being able to integrate ANY set of functions analytically”. Good luck

Love your observation. Observably, that is what we are doing in terms of technology, medicine, and other innovation… Yes, one technology fixes one thing, only to create multiple other complications that require more technology. Yes, one medicine may fix one symptom, only to require more medicine because of multiple side effects.

I have no solution but I seriously wonder what the heck are we doing sometimes…

I think that is a common problem that many people have. They look at the world in a linear fashion when really it is much more complex than that. Economics, climate change, psychology, marketing, finance, you name it and people want to create linear models to follow. Now linear models can work sometimes but eventually the game changes due to too many people following the simple model and things fall apart.

I often find the discussion on climate change to be one that should be looked at from a complex standpoint but instead we tend to view it in a linear capacity. Cause/effect discussions when we truly have no idea.

Love the complexity of your discussion. Having programmed chemical plant reactions in school I can fully understand the complexity that goes into the simplest functions.

bigato said,

We learn much more from a complex system by seeing it as a unity than by breaking it into parts.

et said,

Why not take the opportunity to correct when you repost?

the economical system ? the economic system

Also, I wonder what you mean when you say “humanity has solved all its problems in the past”. There are many problems that our ancestors didn’t solve.

Jacob said,

@et – I will take that opportunity right now. Thanks for pointing it out.

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